|
Credit Card Cashback Offers
By: Nick Davis
Cashback is a popular incentive offered by many credit card companies. What it
means is that for every dollar you spend, your card issuer will give you back
some money, usually in a single payment made once a year.
The amount paid back is calculated as a percentage of your total spending.
Percentages vary, but typically range from 0.5% to 2%. Some card issuers pay
higher rates for purchases in some categories or made through certain retailers.
The Discover® Platinum Card, for example, offers up to 1% cashback normally, but
5% on purchases made from selected merchants in their Get More Program.
Cashback is obviously an attractive incentive, but if you are likely to leave a
balance outstanding on your credit card, it should not be your first priority
when deciding what card to pick. For one thing, many card issuers only offer
cashback as long as you clear your balance every month. For another, if you are
paying interest, the cost of this will probably far outweigh the benefit of
cashback. In such instances, your first priority should be to pick a card with a
low APR (annual percentage rate) and/or a long interest-free introductory
period.
If you are confident you will be able to pay off your balance every month,
cashback is certainly one feature you may want to take into consideration when
picking a card. There can be a few surprises lurking in the small-print,
however, so before applying for a cash-back credit card it’s very important to
read this carefully. In particular, you should check the following:
* Is the headline rate paid on all purchases, or only those after a set amount
of annual spending? The Discover® Platinum Card, for example, pays just 0.25% on
your first $1,500 of spending each year, and 0.50% on the next $1,500. You then
earn a full 1% of each purchase made after your total amount of purchases
exceeds $3,000.
* Is there a cap on the total amount of cash back you can receive in a year?
* Is the cashback payment made by check, or is it simply a reduction in your
bill?
* Is there an introductory bonus offer (e.g. a higher rate of cashback for your
first six months)? If so, check how long this lasts, and what happens to the
cashback rate afterwards.
* Is there a scheme offering you the opportunity to trade your cashback for
bigger discounts with selected merchants? If you are likely to spend money with
these merchants anyway, this may have added appeal.
* Are there any hidden costs, e.g. an annual fee or a fee to redeem your cash
back credit?
In recent months some card issuers have been cutting back on their cashback
offers, reducing the rates paid or in some cases abolishing it altogether. If
you want cashback, therefore, it’s very important to shop around, and not simply
respond to the first offer that drops unsolicited into your mailbox. Credit card
comparison websites such as www.finest-credit-cards.com make this easier by
displaying all the best current offers, updated daily, alongside unbiased advice
on choosing and using a credit card.
About the Author:
Nick Davis is the owner of http://www.finest-credit-cards.com , which aims to
match you up with the ideal credit card to suit your situation. With details of
all the leading card offers updated daily, plus informative articles to guide
you in your choice, you will never pick the wrong credit card again
|